By: Modesto P. Sa-onoy
A newspaper report last week says that Philippine sugar production dropped by 27.48 percent in December. Quoting the Sugar Regulatory Administration, the report further said that for the first week of December 2019 sugar output was 311,617 metric tons, lower than 429,680 MT of the same period last year.
This is not news but a reaffirmation of negative developments. Since 2016, sugar production in the country had been declining. The SRA statistics are giving bad omens for the future of the industry. In 2016 the land devoted to sugarcane cultivation was 413,435 hectares, already lower than the previous year. For crop year 2019 – 2020, SRA recorded only 406,490 hectares planted to the crop.
Production wise, in 2016, the sugar output was 2.238 million tons, but this dropped to just over 2.074 million tons last year. This significant 27.48% drop during the first four months of the 2019-2020 milling season indicates the country’s production can drop below two million tons by the end of the production year.
On the other hand, total withdrawals, either for consumption or export, was 2.163 million in 2016 but in 2019, this withdrawal was down to 1.88 million tons. Note that there were always lower withdrawals than production.
In the news report citing the SRA, demand for sugar from September 1 to December 1, last year declined by 6.13 percent, from 366,023 MT to 343,597 MT.
Total cane milled also decreased by 24.27 percent, from 4.902 million MT a year earlier to 3.712 million MT, the result clearly from reduced acreage devoted to sugarcane. The refined sugar output also fell 29.90 percent to 110,654 MT from 157,855 MT a year earlier.
The mill gate price increased by 3.47 percent, from P1,463.85 per 50-kilo bag to P1,514.71 per 50-kilo bag, the SRA report showed, while the prevailing retail price of raw sugar in the market fell by 17.43 percent at P45 per kilo from P54.50 per kilo a year earlier. The increase in mill gate price is minimal but the shelf price is still high, albeit down a bit.
What do they portend? Where did the rest of the sugar go? Or are we consuming less while the population is growing? Is this the reason prices from the mills are down but shelf prices are still high? Or is there more sugar in the local market than what we produced? Are these the results of smuggling and importation?
There are suspicions that the revelation of declining sugar production is a manipulation of data to justify import liberalization. I don’t buy that speculation. We are facing here a reality – many lands are being withdrawn from sugar production. This decline had been going on for the last several years and from the look of the annual SRA data, the decline continues. This I believe is the omen that the sugar industry will soon be marginalized in the economic scheme of things.
This attrition is inevitable due to the constraints caused by government policy and rising idea that socialism, although still at some lower stage, is the best for this country. No matter what the government will do now, short of subsidizing the sugar industry can stop the clock of time when imports of sugar will be free of unnecessary restrictions. This means a more practical approach of importation.
I have written lengthily on the adverse impact of the socialistic agrarian reform program that parceled the sugar farms into small plots. That was the beginning of the present problem – driving away investments in the industry. Unless the farms are of plantation size, that is, at least 50 contiguous hectares, mechanization that will reduce cost is impractical.
The small agrarian reform lands are not capitalized so that the farmers had to go back to primitive means of cultivation. Not surprisingly, they have leased their lands and remain laborers either in their own farms or outside non-agricultural work.
During the last three years, 9,000 hectares were lost to the sugar industry. Aside from infrastructures and commercial and residential areas, there are now new crops in Negros, like bananas and pineapple. The trend does not seem to abate but may increase.
The grim statistics may yet be reversed, but we heard nothing of what is being done to prevent the inevitable.
